Zepto, the country’s only standalone quick commerce player, has raised USD 665 million in a funding round, doubling its valuation to USD 3.6 billion post-money. This sets the stage for the quick commerce battle to heat up with rivals like Zomato-owned Blinkit, public-markets-bound Swiggy Instamart and Tata Digital–owned BigBasket also scaling operations.

Zepto’s funding round was led by existing investors Glade Brook Capital, StepStone Group and Nexus Venture Partners, while other existing investors Goodwater Capital and Lachy Groom also participated in it.

To maintain its momentum, Zepto said it will also expand its workforce and have a total of around 2,200 employees in the coming quarters, up from around 1,700 currently.

Zepto became the first unicorn in India last year after it raised USD 235 million at a USD 1.4 billion valuation. Zepto will double its dark stores count from 350 in 10 cities to over 700 by March 2025, while also entering another 10 new cities like Ahmedabad, Chandigarh and Jaipur.

New investors like DST Global, Avenir Growth Capital, Lightspeed Venture Partners and Avra, founded by former Y Combinator Continuity fund head Anu Hariharan, joined the round taking a bet on the company started by Stanford dropouts – Aadit Palicha and Kaivalya Vohra. The duo–both of whom are aged 22– have now raised USD 1.2 billion since starting up in 2021.

This comes as Zepto is on track to handle more than USD 1 billion of goods a year, based on May’s performance. The company said about three-quarters of its warehouses were making an operating profit in May. It added that the stores now take six months to become profitable compared to about two years previously.

Zepto plans to double warehouses to more than 700 by March 2025 by reinvesting sales from mature stores to fund the expansion.

“I believe we will be ready to go public relatively soon,” Co-founder and Chief Executive Officer Aadit Palicha said. The startup is now planning an initial public offering sometime next year, aiming for a multi-billion dollar listing on the back of a healthy balance sheet.

Zepto's competitors include e-commerce giant Amazon.com, SoftBank Group Corp.-backed Swiggy, publicly traded Zomato Ltd, and conglomerate Tata Group’s BigBasket.

This funding round also marks the formal launch of Avra Capital, a growth equity fund founded by Anu Hariharan, the former Managing Director of Y Combinator Continuity.

Zepto is Avra Capital's first global investment. Commenting on this milestone, Hariharan said, "We are thrilled to partner with Zepto once more, this time through Avra, marking our first global investment. Zepto may appear to be a mere 10-minute quick commerce company at first glance, but they are transforming Indian e-commerce by creating the 'Hyperlocal Amazon,' combining affordable prices with local convenience."

Article Source – Zepto, News Bureau